I did not realize they were trying to compete in the first place.
Why does every single picture of Gabe look like hedonism bot wrapped in skin?
That’s not how Capitalism works!
/s
The larger company simply needs to create/invent problems that the smaller company cannot solve, and then sell a solution.
And buy them out at some point too. Very important step.
Amazon tried getting into game production as well and seems to have middling results at best. Having the financial backing is significant, but it doesn’t guarantee success.
So after investing millions in this, this is incredible insight that the VP has gained:
- Talk to Real Customers Before Writing Code
I really recommend reading his LinkedIn post, just to understand how these people think, and how fucking incompetent people at the top raking in millions are. It’s surprisingly honest for a LI post (although that bar is very low), probably because the guy is now retired and doesn’t give a shit anymore.
I honestly never even processed that Prime Gaming was a thing and that it was trying to compete with Steam. I just knew they purchased Twitch and thought they’d probably abandon it into a shitty, old and slow site like they did with IMDB and Goodreads.
Could you link a screenshot of the LinkedIn post? I don’t want to make a LinkedIn account.
As VP of Prime Gaming at Amazon, we failed multiple times to disrupt the game platform Steam. We were at least 250x bigger, and we tried everything. But ultimately, Goliath lost. Here’s why:
The 15+ year long attempt to challenge Steam started before I was VP of Prime Gaming, but we never cracked the code. Not under my leadership or anyone else’s.
The first way we tried to enter the online-game-store market was through acquisition. We acquired Reflexive Entertainment (a small PC game store) and tried to scale it. It went nowhere.
Then, after buying Twitch, we created our own PC games store. Our assumption was that gamers would naturally buy from us because they were already using Twitch. Wrong.
Finally, we built “Luna,” a game streaming service that let people play without a high-end PC. Around the same time, Google tried the same thing with their product “Stadia.” Neither gained significant traction. The whole time, Steam dominated despite being a relatively small company (compared to Amazon and Google).
The mistake was that we underestimated what made consumers use Steam.
It was a store, a social network, a library, and a trophy case all in one. And it worked well.
At Amazon, we assumed that size and visibility would be enough to attract customers, but we underestimated the power of existing user habits. We never validated our core assumptions before investing heavily in solutions. The truth is that gamers already had the solution to their problems, and they weren’t going to switch platforms just because a new one was available.
We needed to build something dramatically better, but we failed to do so. And we needed to validate our assumptions about our customers before starting to build. But we never really did that either.
Just because you are big enough to build something doesn’t mean people will use it.
Reflecting on these mistakes, I realize how crucial it is to deeply understand customers before making big moves. That’s why James Birchler’s guest newsletter caught my attention—his piece is a practical guide on obtaining real customer insights and using them to challenge entrenched assumptions that can hurt product success.
James breaks his advice down into three key steps, illustrated with stories from his time as VP of Engineering at IMVU:
- Talk to Real Customers Before Writing Code
- Test Assumptions, Not Just Features
- Build Measurement Into Your Process
After explaining how he learned these lessons the hard way (getting screamed at by customers and board members), James shares action items you can implement within a week to improve how you understand your customers.
I wish Amazon had followed James’ playbook before trying to take on Steam. But since we didn’t, at least you can.
At Amazon, we assumed that size and visibility would be enough to attract customers
Literally “we’re big so we’ll make money” with no thought on the product actually being offered.
Hilarious.
“But we acquired a successful franchise! All we have to do is attach a handle to it and crank it and the money will come flying out!”
Feels like every 5 years some major Internet company looks at how many billions video games draws in, established markets with PC and consoles, and how much hype and marketing gets thrown around the space and decides they can do it better.
With zero understanding of what consumers want, expecting to be able to charge extra for content that no one asked for or services like steam offer for free, and usually with such an awful UI and interactions with the consumer you wonder if they see potential customers as anything but cattle to be figuratively slaughtered and try to milk as much currency as they can with overpriced subscription(s) and not-so-micro microtransactions.
Edit: For those that want examples, most recent one comes to mind is Stadia
Every prime gaming offer I took was for games on steam. I really thought they were just promoting twitch with drops and stuff, not actually trying to compete. Haha, the balls.
Lrrr: Why does the larger company not simply eat the smaller one?
It’s not as if gamers could smell the stench of corporate greed
They were competing?
I saw this posted a couple days ago which pretty succinctly summarizes the current state of the market.
Commented this a year ago, and its just as relevant today.
Huh, did they make an alternative I don’t know about?
Steam is a platform that happens to also have a storefront. Other companies are building storefronts and hoping that’s enough.
If you can’t provide fast downloads, cloud saves synced across devices, achievements, mod support, friends lists, and multiplayer support, it’s not a real option. Being cheaper or having some exclusives aren’t attractive. Gog already has the drm free angle to be a legitimate competitor.
Being consistently cheaper would actually be attractive to many people. The thing is, none of these competitors can even muster that. Steam consistently has better sales, more often. And it’s pretty funny seeing Amazon of all things not able to match or beat that. They are known for undercutting the competition, even at their own expense, just to get customers; It’s literally how they got to be as big as they are.
Epic kinda tried that by giving away tons of free games in the Epic Games Store. It didn’t work.
If I want Steam games cheaper, I go buy a Steam key for that game from a separate retailer and activate it on Steam. Save like 50-70% irrespective of Steam sales. It’s remarkable that Steam allows us to even do that in the first place.
Epic also generated a lot of bad blood by scooping up Kickstarter projects and ordering the devs to cancel the Steam releases, releases that had already been paid for by backers. A bunch of potential customers refused to buy from Epic on principle after that.
The timed exclusivity deals are what did it for me
Bringing that bullshit to the PC gaming market guaranteed I’ll never spend a penny on their storefront.
If the carrot they’re leading with is limiting choice, I’m not going to hang around waiting to find out what the stick might be if they get successful
Epic is doing me a favor, I get to keep my money while I play my backlog, then I buy the game on Steam / GOG for cheaper later on.
I’m one of them. For all their trash talk about Steam being a monopoly, Epic Games sure pulled some hypocritical, anticompetitive shit in their attempt to replace one monopoly with an objectively worse, consumer-hostile one.
Epic Games is creating a monopoly in PC gaming - they keep making bad decisions and leaving Steam as the only good option
Look at market shares, Steam is in a monopolistic position, they can turn around and fuck up the whole market whenever they want, and people like you are encouraging it.
You realize that they’re anti DEI over there? I don’t think drag would ever be hired by Valve!
Source?
Yep. I have a bunch of Epic’s free games. Never bought a single game from them and probably never will.
The experience on Steam is just better. And Epics lawsuits look less like they’re fighting for the little guy and more that they are envious of the market that other companies have.
Maybe if they had done that with brand new games and not just a few good but old games and tons of games nobody has even heard of before. It’s not really even in the same league as just genuinely being cheaper than the competition. It’s a gimmick. Steam also sometimes gives games away for free, while still having tons of deep discounts all year long.
I’m the same. I’ll look on Steam first just because I would prefer to keep all my shit in one place, but if it’s not the cheapest price I’ll get it somewhere else. Although 90% of the time, the cheapest price is just a steam key being sold by a 3rd party (I like Eneba, personally).
The one time Epic was cheaper, was when they gave out Civ6 for free. I bought the two major DLC expansions through Epic instead of buying everything on Steam just because I didn’t have to buy the base game and the DLCs were $10 cheaper anyway.
I am an extremely cheap and patient gamer. This is how I look at both the stores.
If I want free games, I’ll go to Epic.
If I want good deals, I’ll go to Steam.
Why would I go to Epic for good deals when it’ll either have a good deal on Steam OR be free on Epic after a few months or a year?
And their $5 off coupons during numerous sales
Steam is a platform that happens to also have a storefront.
I would like to see government intervention to break up Steam to remedy this
Though arguably Epic is way bigger of a platform since it goes from developer to end user
What exactly would you be breaking up? Steam isn’t a mishmash of companies…
forums, store, launcher, workshop
The forums company will be where all the money is at, think of the profit!
If your software is profit motivated then it doesn’t need to exist
Not that it would make any difference for the end user because it should all be modular enough for the user to mix and match any of those services with any other services
Does the dadaist approach to arguments usually work for you?
I thought you would have reference Stallman in trying to dismiss me
I’d rather see competitors actually try and be better than steam rather than make steam worse.
How did you get “make steam worse” from that?
Everything else still exists, just not controlled by Valve
…Breaking steam up would make it worse.
How? If any feature is necessary then it will be filled by someone else
You aren’t losing anything
Because each independent section would try to make more money and end up breaking things and adding new shit users don’t want but marketing execs think are good.
Then find a different workshop/forum/launcher to pair with the Steam store
In no world is it worse than what we have now
Name an example of a better workshop, I’ve used nexus mods and it’s a complicated mess that requires a subscription to get normal download speeds for content created for free by other people
If steam is a client not a store then whichever steam allows to be built into their client
No don’t break up Steam. Standardize DRM and make digital games licenses ownable/transferable. I could see the EU eventually doing this.
I say this as someone who loves Steam but wants more ownership, in the games I “own”.
They offer keys which allows for third party sellers to exist, and there are a handful of legitimate sites that sell keys for steam.
Yeah, but where do you have to go to redeem those keys and then subsequently have to open their program every time you wish to use your purchase (which you don’t own). Steam is very good at promoting itself and locking people into their platform, it’s a constant free advertisement program where they have total control and no competition.
I understand the “Steam is fine” position, but I also wish we weren’t always turning to this ONE supplier for a goods or service because it always hits the hardest when corruption takes over. Would love for these threads to be filled with multiple conversations of all these great different gaming services everyone personally loves for one reason or another, instead of comparing the crappiness between these few huge mega-corporations.
It’s a launcher successful on the most popular OS in the world that they don’t even own that anyone can come in to compete at. And had decades to do so when “PC gaming was dead” so was wide open for anyone that wanted to try to reach potential customers over fixating on the console demographic. What more do want.
It doesn’t even come pre-installed with Windows.
Sounds like a free market proponent.
Can I give the classic example of US healthcare where for very minor benefits, the absolute richest can afford to have great healthcare whilst everyone else seems to be crippled (financially) by even minor ailments.
But the industry is worth billions, the line goes ever up, and the shareholders are happy. Just fuck the customer.
Nobody else has a platform that comes close to competing and most of my games are already on there. From my pov this looks like an awful idea.
To be honest I really do prefer buying games on GOG. One day steam will go shit and we will be stuck with huge game libraries locked there. The day GOG goes dark I’ll still have all the offline installers of everything I bought.
Piracy is our friend. If Steam ever goes to shit, gamers would go back to piracy.
The only launcher I use the same amount if not more is gog.com. Give me those good old games.
I use gog, but fuck the launcher. Fuck all launchers. An icon on desktop is all I want.
Thankfully it’s easy to get no matter the storefront.
GoG is just the best. They don’t have all the nice things Steam has, like workshop for example, but they compensate for it by actually selling you a game, not just renting it out with drm.
GOG providing installers is absolutely amazing.
Maybe it’s nice on windows, but on other systems, got still relies on steam.
GOG + Lutris
Lutris is just a pain compared to proton. I’m not going to say that its terrible anymore but 90% of the games that I play regularly on steam just work straight out of the box.
Valve wins by doing nothing… it’s a tale as old as time.
Steam’s market share is a huge factor in why their competition never succeeds, but it’s hardly the only reason. Steam is a whole platform, not just a launcher or storefront. And they’re also cognizant that the consumers are not just a revenue source to be milked, but actually long-term customers whose loyalty is important.
It really shouldn’t be a surprise that when you enter an established market, you’re not going to accomplish shit by providing a lesser service while simultaneously treating the consumer worse.
MBAs walk into this arena thinking they’ve got their quarterly agile reports synergized outside the box to the max.
Somehow none of them have learned the concept of long term customers
Gaben and Steam: does nothing, wins
It always baffles me when I see an established company fail to understand long-term customers and still expect any kind of meaningful growth.
It’s because the stock market doesn’t care about anything except the next quarter. Valve can think long term because they’re privately owned.
The loyalty thing is what kept me.
I was wary of another gaming platform, there were so many and they all seemed the same, I never liked one over the other - they were just means to an end.
A few years back I really wanted to play RDR2 with my friends. It was expensive and I never pre-order, but as soon as it came out on (a small) sale I bought it for all 4 of us.
It was a lot of money for me, but I really wanted the story to play with everyone.
All was well at first, until we had each completed the tutorial and met up in open world. That’s when we learned that the game was based on GTA and the devs do not care about hackers.
We had one fucking with us for over an hour, teleporting us into the air and dropping us, setting us randomly on fire, spawning space ships and so on.
I begged in voice for them to just leave us be, to no avail.
We are all older, we rarely have time to play together. I was crushed.
I was an hour over the return time on Steam, one of the other friends took a bit longer exploring and was even more than that.
I contacted steam anyway and tried to get a refund, and they granted it for all of us.
Later I learned this was a thing in RDR2 and there was now the ability to create private lobbies, but I just can’t make myself try it and give Rockstar any money.
Steam however, won a lifelong fan. They didn’t have to honour the refund, and they don’t have to provide personal support that offers more than just the canned responses, but they do.
I hope Gabe lives forever, or finds another like him to carry the torch after he’s gone.
Yeah my loyalty to them comes from the fact that they treat me like they value my business. Every company says they do, but they help when help is needed and get out of the way when it isn’t. The only other businesses I feel that way towards are small restaurants and bars. It’s not an unconditional loyalty but so long as they treat me right they’ll keep my business.
They are reinvesting money back into r&d, and linux. They keep updating everything. Wish they kept making steam controllers. I have seen steam change a lot over the last +10 years.
Tim Sweeney shit on Linux gamers enough that I refused to ever give Epic a penny
They came out of the gate with anti consumer bullshit in the form of exclusivity deals. Trust was shattered before they even got going.
Gaben should sue Epic Games for monopolistic business practices - Epic keep making bad decisions that leave gamers with no good choice but Steam
That would wind up being one of those court cases lawyers love citing wherever they get the chance
steam pros: a store that always has a sale or big holiday sale right around the corner, a social network, a library for game info and game modding, and a trophy case etc.
what was amazon offering? full priced games, no sales that beat steams (a free game offer now and then only if you give them $140 a year and forget about it), and shitty cloud streaming of few games? so they tried nothing actually meaningful, were all out of ideas, but shocked they lost
oh and also on a platform notorious for making e-books unable to work on pcs, forcing their proprietary hardware for a PDF. and now they’re actually going in and changing/censoring whats written in books without authors consent.
